S&P; Again Downgrades Bergen’s Debts

For the second time in two months, a leading credit rating agency downgraded debts owed by Bergen Brunswig Corp. to junk bond status, citing concerns about the Orange-based drug wholesaler’s future cash flow. Standard & Poor’s in New York lowered ratings on eight Bergen issues to below investment grade, which could translate into higher borrowing costs. Bergen, the nation’s third-largest distributor of pharmaceuticals and medical-surgical supplies, has more than $1 billion in long-term obligations. Bergen’s debt ratings have been under review since June. In December, S&P; and rival Moody’s Investors Services downgraded their ratings on several issues of Bergen debt, rendering certain bonds to the level of high-risk corporate debt known as junk bonds. S&P; said Bergen may be facing lower earnings and higher interest expenses under its new bank borrowings, putting a squeeze on the company’s cash flow. The company has been struggling with stiff competition, falling earnings and problems at two companies it acquired last year.